Smart Investor: Best Dividend Stocks, Utilities as a Growth Play, and a Revival for SPACs

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In this week’s newsletter:

• Weekly Markets Wrap
• 5 Trends to Watch in a Post-Iran War Landscape
• What War? US Stocks Hit Record Highs
• Iran War Gave Little for US Stock Fund Managers to Do
• AI, Quantum Computing Feed SPAC Revival
• OpenAI, Anthropic Highlight Revenue Gains as IPO Hype Builds
• Q2 Market Outlook: Why a Stock Barbell Strategy Is Ideal for Today’s Market
• Utilities Stocks Keep Rallying as Investors Bet on Power Demand Growth
• The 10 Best Dividend Stocks

As the Iran war seems to continue to fade toward a resolution, stocks pushed further into record territory, aided by a renewed slide in oil prices.

This has been an odd period for the markets. For starters, despite the war spurring a massive oil shock – which, despite the peace headlines, is not yet resolved – the US stock market has not seen extreme volatility. In this great read on stock market history, Morningstar Indexes strategist Dan Lefkovitz shows how this year’s price swings compare to the past.

Meanwhile, Leslie Norton explores how fund managers adapted their portfolios to the conflict, explaining why their buys and sells were on the margins, rather than the kinds of big moves you might expect. With the war winding down, Norton highlights trends that money managers will be watching from here. For an additional take, check out this deep dive into stocks and the US economy by Morningstar chief US market strategist Dave Sekera and senior US economist Preston Caldwell.

Stepping back from the war and its ripples, this week we took a close look at how the once-sleepy world of utilities stocks continues to evolve from a haven for dividend hunters into an earnings growth story. We’ve updated our list of the 10 best dividend stocks to buy now. These names all have economic moats and are trading in undervalued territory, according to Morningstar analysts.

While the past couple of months have largely seen investors grow cautious, the appetite for riskier fare has not been completely absent. Case in point is a revival of the use of special-purpose acquisition companies, aka SPACs. This structure was all the rage coming out of the pandemic, until too many investors got burned. But as PitchBook’s Michael Bodley writes, thanks in part to quantum computing and artificial intelligence companies, SPACs are making a comeback.

Lastly, PitchBook’s Jacob Robbins digs into yet another layer of the battle between OpenAI and Anthropic, ahead of what are expected to be massive IPOs from the AI giants. OpenAI is reported to have taken a dig at Anthropic over how it reports a key metric known as annual recurring revenues. As we explain, the way ARR is reported could be a significant factor in the success of each company’s respective debuts.

As always, be sure to visit our Markets page for our latest coverage and live stock market updates, along with our full weekly calendar of key upcoming data and events